(2)Where, under an arrangement made between a person carrying on the business of hotel to which this Act applies and any other person having close connection with him, any food, drink, or other services is or are provided on the premises of such hotel by the second mentioned person and the Income-tax Officer is of opinion that such arrangement has been made with view to avoiding or reducing the liability under this Act by the first-mentioned person, then,(a)the second mentioned person shall also be deemed to be a person carrying on the business of a hotel to which this act applies; and(b)hotel-receipts tax shall be charged on the second mentioned person in respect of charges for food, drink or other services so provided by him as if such charges were the chargeable receipts of the business of a hotel deemed to be carried on by him under clause (a), and all the provisions of this Act shall apply accordingly.Explanation:- for the purposes of this sub-section,--(i)a close connection shall be deemed to exist between a person carrying on the business of a hotel and another person if, in relation to the person carrying on the business of a hotel, such other person is a person referred to in clause (b) of sub-section (2) of section 40A of the Income-tax Act(ii)any food, drink or other services shall be deemed to have been provided on the premises of a hotel if the same is or are provided in the hotel or any place appurtenant thereto and where the hotel is situate in a part of building, in any other part of the building.
